The competing bids — from Skydance-owned Paramount for the entire company and from Netflix for only Warner’s studio and streaming assets — face expected antitrust scrutiny from U.S. regulators, with trade groups sounding alarms about the consequences of further consolidation across the media and entertainment industry.
Warner Bros. Discovery’s board rejected Paramount’s $77.9 billion hostile takeover bid for the second time Wednesday, urging shareholders to support a rival $72 billion offer from Netflix for the company’s studio and streaming operations. The board said Paramount’s offer was “not in the best interests of the company or its shareholders,” citing excessive debt financing and inadequate shareholder protections.
The competing bids face expected antitrust scrutiny from U.S. regulators, with trade groups raising concerns about further consolidation across the media and entertainment industry. Shareholders have until Jan. 21 to decide whether to tender their shares to Paramount.
Board Cites Debt Risks in Rejecting Paramount
In a letter to shareholders Wednesday, Warner Bros. Discovery Chair Samuel Di Piazza Jr. said Paramount’s offer “continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed.” The company’s agreement with Netflix, he said, “will offer superior value at greater levels of certainty.”
Warner described Paramount’s proposal as essentially a leveraged buyout and said operating restrictions in Paramount’s terms could “hamper WBD’s ability to perform” throughout a transaction. The board’s stance continues a pattern of repeated rejections of Skydance-owned Paramount’s overtures.
Paramount did not immediately respond to a request for comment Wednesday. Its hostile bid remains on the table.
The Two Deals Compared
The bids would reshape Warner Bros. Discovery in different ways. Netflix’s proposed acquisition covers only the company’s studio and streaming operations — including legacy TV and movie production arms and platforms such as HBO Max. If the Netflix deal closes, Warner’s news and cable operations, including CNN and Discovery, would be spun off into a separate company under a previously announced separation plan.
Paramount’s bid is for the entire company — studio, streaming, news networks, and cable channels combined.
Paramount Moves to Sweeten Its Offer
Paramount has worked to strengthen its position in recent weeks. Late last month, the company announced an “irrevocable personal guarantee” from Oracle founder Larry Ellison — the father of Paramount CEO David Ellison — to back $40.4 billion in equity financing for its offer. Paramount also raised its promised payout to shareholders to $5.8 billion if the deal is blocked by regulators, matching Netflix’s breakup fee.
Regulatory Scrutiny Expected
Either merger would take more than a year to close and would draw significant antitrust scrutiny, according to the Associated Press. A transaction of this scale would almost certainly trigger a review by the U.S. Justice Department, which could sue to block it or request changes. Regulators in other countries may also challenge either deal.
President Donald Trump has made suggestions about personal involvement in whether a deal will go through, according to the Associated Press.
Trade groups have continued to raise alarms. Cinema United, which represents more than 60,000 movie screens worldwide, told a Congressional antitrust subcommittee Wednesday it was “deeply concerned” that Netflix’s acquisition could harm moviegoers and theater workers, citing the streaming giant’s reliance on its online platform. The group said its concerns were “no less serious” about Paramount’s bid, warning that further consolidation could result in job losses and less diversity in filmmaking.